By Shirley A. Lazo
DOMINO'S PIZZA IS GIVING share-holders more dough. Last Tuesday, the Ann Arbor, Mich.-based company, which went public in July 2004, hiked its quarterly common dividend 54%, to 10 cents a share, from 6.5 cents. (Domino's paid its first dividend Dec. 15.) Disbursement will take place March 30 for investors on the books March 15. Domino's yields 2.3%.
Chief Executive David A. Brandon said Domino's /zigman2/quotes/201587798/composite DPZ +1.95% (ticker: DPZ) cash flow "is plentiful enough to not only pay a significant dividend but also reinvest in the business. Longer term, we will look at a share buyback."
Last year Domino's generated $87.7 million in free cash flow. "We are now one of the highest dividend-yielding companies in the quick-service restaurant industry," Brandon added. "[We have] significant remaining free cash flow to invest in the growth of our core business while also paying down our debt."
With over 7,400 locations in more than 50 countries, 45-year-old Domino's trails YUM! Brands /zigman2/quotes/209029767/composite YUM +1.20% ' Pizza Hut division in overall market share. But Domino's is No. 1 in pizza delivery, controlling around 20% of that business. In 2004, Domino's earned $62.3 million, or 81 cents a share, on revenues of $1.45 billion, versus 2003 profits of $39 million on revenues of $1.33 billion. The company used capital raised from its initial public offering to cut its $908 million debt by more than 10%.
Reiterating earlier company estimates, Brandon said Domino's is "confident" about producing U.S. same-store sales growth of 1% to 3% this year; international same-store sales gains of 3% to 5%; net store additions of 200 to 250; global sales increases of 4% to 6%; and an increase in annual net earnings of at least 11%. Traded on the Big Board, the stock changes hands not far from its 52-week high of 19.01 set Dec. 6.
DEERE IS GROWING its dividend again. The world's largest producer of farm equipment, Deere /zigman2/quotes/207941296/composite DE -2.43% (DE) on Wednesday boosted its quarterly common payout 11%, to 31 cents a share from 28 cents. The new dividend is payable May 2; the record date is March 31. Payouts held steady for six years at 22 cents until they were increased in February 2004. Disbursements have been paid without interruption since 1937. Deere yields 1.8%.
Deere is listed on the New York Stock Exchange, where its shares currently are priced at 70 and change. The stock's 52-week high is 74.93, its low 56.72. Institutions own roughly 80% of Deere's 245 million common shares outstanding.
Deere's corporate roots as a supplier of farm equipment trace back to 1836. Although the company has branched into construction, forestry and lawn-care equipment, big-ticket machines such as combines, tractors and tillers still contribute nearly half of sales. Farmers are buying plenty of new machinery these days, due to higher grain prices and hefty government crop-price supports. Thus, Deere, which is headquartered in Moline, Ill., posted record first fiscal-quarter results (for the period ended Jan. 31).
Net surged 30% from a year earlier, to $222.8 million, or 89 cents a share, on an 18% jump in revenues, to $4.13 billion. Deere expects construction-equipment sales to climb 10% to 12% this year and sales of farm equipment 7% to 9%.
AS THE WORLD'S NO. 1 SEMICONDUCTOR- CHIP MAKER , Intel /zigman2/quotes/203649727/composite INTC -1.46% (INTC) was featured in this space Nov. 15 when it doubled its quarterly cash dividend for the second time in 2004 and enhanced its stock-buyback program. Speaking at the Goldman Sachs Technology Conference in Phoenix last Wednesday, chief financial officer Andy D. Bryant said Intel will continue to focus on returning cash to shareholders via share repurchases and perhaps another payout hike. If a good opportunity presents itself, Intel might make an acquisition.
At year-end 2004, the Santa Clara, Calif., company held $17.2 billion in cash and equivalents, up 48% from the 2003 level. Dividends have been paid since 1992. The Nasdaq-listed stock is a Dow Jones Industrials component, pays a quarterly dividend of eight cents a share and yields 1.3%.
AMONG THE WEEK'S OTHER dividend events, NL Industries /zigman2/quotes/210222881/composite NL +1.95% (NL) hiked its quarterly common dividend to 25 cents a share from 20 cents, but will pay it in shares of majority-owned Kronos Worldwide. The payment date is March 29; the record date March 14. Kronos is a leading supplier of titanium dioxide, which maximizes the whiteness, opacity and brightness of paints, plastics, paper, fibers and ceramics...Staples (SPLS) voted to increase its annual dividend 25%, to 25 cents a share from last year's first-ever annual payout of 20 cents. The payment date is April 14 for shareholders of record March 28. The world's largest office-products company, Staples also will split its stock 3-for-2, with distribution of the new shares scheduled for April 15 to holders of record March 29.